2018 (12) TMI 437 - AT - Service Tax

Advertising Agency Service - Print industry - electronic media - Revenue entertained a view that the appellant s payment of Service Tax on 15% of the commission received by them is not proper and they should have discharged the Service Tax on the full value of 100% - CENVAT Credit. Print industry - tax on 100% amount - Held that - As the disputed issue stands considered by the Tribunal in various decisions, it was legally obligatory on the part of the adjudicating authority to go through the same and follow the decisions - Similarly the Circulars issued by the Board with which the authorities working under the C.B.E.C. are bound, as per settled law, should have been taken into consideration. Having not done so, we feel that the impugned order is required to be set aside and the matter needs to be remanded to the adjudicating authority for fresh decision - matter on remand. Electronic media - tax on 100% amount - CENVAT Credit - duty paying document - Held that - Appellant are ready to pay tax on the full 100% value collected by them from their customers and further forwarded to the electronic media - As long as the invoices show the appellant s name, they would be eligible documents for the purpose of Cenvat credit. Appeal allowed by way of remand.

Summary

Issues:
1. Proper payment of Service Tax by the appellant on commission received for forwarding advertising material to print media.
2. Correctness of Service Tax payment by the appellant on forwarding advertisements to electronic media and availing Cenvat credit.

Analysis:

Issue 1:
The appellant acted as a middleman between clients and print media, retaining 15% commission and paying Service Tax on it. Revenue contended that Service Tax should be paid on the full 100% value. The appellant argued that the activity did not fall under "advertising agency services" and the 85% transferred to print media was for printing, not for services to customers. The appellant cited Board Circulars and Tribunal decisions to support their case. The Tribunal found the adjudicating authority failed to consider relevant precedents and Circulars, leading to the order being set aside for fresh decision.

Issue 2:
Regarding the second issue, the appellant agreed to pay tax on the full 100% value collected from customers and forwarded to electronic media. The appellant defended the validity of invoices issued by electronic media, stating the inclusion of customers' names did not invalidate them for Cenvat credit. The Tribunal agreed with the appellant on this point but remanded the matter for re-consideration in light of various decisions. The appellant was granted the opportunity to present additional judgments or documents. The appeal was allowed by way of remand, and the stay petition was disposed of accordingly.